South Sudan joins the East African Community The East African Community (EAC) is the most integrated trading bloc in Africa. In 2005, the members established a customs union, and then in 2010 it became a common market. There are ambitious plans to establish a monetary union by 2024. According to a recent report, the region is wealthier and more peaceful as a result of the increased integration. Economic models suggest that bilateral trade between member countries was 213% higher in 2011 than it would have been without the integration. This is despite the fact that progress on fully eliminating trade barriers has been rather slow and there are still a large number of non-tariff barriers. Until recently the customs union was made up of Burundi, Kenya, Rwanda, Tanzania and Uganda. Very recently, South Sudan joined the bloc. This presents a tremendous opportunity for South Sudan. which was recently recognized as an independent country. South Sudan is one of many developing countries that are dependent on oil exports forthe majority of its export revenues and oil prices have been falling due to increased supply of oil in the market, The fall in the price of oil has resulted in a worsening of the current account and lower government revenues. Regional economic integration might help South Sudan to diversify its economy. Agriculture is one potential area that South Sudan could focus on to diversify its economy. According to some estimates, 70% of land is suitable for agriculture, but less than 4% is currently being cultivated. The large flood plains in the country are suitable for rice production and the hope is that South Sudan can develop a comparative advantage in this essential food. South Sudan is landlocked and most of its road network is unpaved. This is just one example of its poor infrastructure. Since infrastructure is an expensive investment. regional cooperation will be vital for improving its road systems. Furthermore, effective transport links to sea ports in Kenya and Tanzania will allow for greater trade and therefore economies of scale. In the short term, there will be challenges for South Sudan associated with joining the common market. For example, before Rwanda joined the EAC in 200?, there were lower tariffs on many imported inputs. However, the cost of living for the poor population rose because of trade diversion that occurred after joining the EAC. South Sudan is likely to face the same problem. Labour costs in South Sudan are higher than those of other member countries and years of conflict have left the population with low levels of education and skills. This may present a barrierfor South Sudan in attracting foreign direct investment, despite being part of the common market. Figure 1: Intra-East African Community* trade in goods (USD$bn) Ever-closer union 2.5 2.0 1.5 USD$bn 1.0 0.5 0 1995 2000 2005 2010 2015 *Burundi, Kenya, Rwanda, Tanzania and Uganda. Not including South Sudan, which acceded to the treaty in 2016. [Source: www.eacgermany.org, accessed 3 May 2018]